Questerre Energy Corp. reported on June 4 that it has executed a letter of intent (LOI) with a senior E&P company to settle outstanding litigation and acquire all their assets in the St. Lawrence Lowlands, Quebec.
“On closing, we will gain operatorship of our acreage in the Lowlands,” said Questerre president and CEO Michael Binnion. “We will be in a much better position to communicate directly with municipalities and address local concerns and acceptability. Our approach is that good relationships with local communities comes first and development second."
Pursuant to the LOI, Questerre will acquire the exploration rights to 753,000 net acres in the Lowlands, associated wells and equipment, geological and geophysical data and other miscellaneous assets.
Once the transaction is closed, both parties will release each other from all claims related to the outstanding litigation. Other consideration including cash and the security required for the assumption of abandonment and reclamation (A&R) liabilities is about $16.1 million in aggregate. Questerre may post a letter of credit as security for the A&R liabilities.
Closing of the transaction is subject to the enactment by the Ministry of Energy and Natural Resources in Quebec of the following regulations: the Regulation Respecting Petroleum Exploration, Production and Storage in a body of water; the Regulation Respecting Petroleum Exploration, Production and Storage on land; and the Regulation Respecting Petroleum Exploration, Production and Storage Licenses, and Pipeline Construction or Use Authorization.
Questerre Energy Corporation anticipates the final regulations could be published around the end of the second quarter of this year. Additional conditions to closing include the execution of a purchase and sale agreement.
Questerre Energy is leveraging its expertise gained through early exposure to shale and other non-conventional reservoirs. The company has base production and reserves in the tight oil Bakken/Torquay of southeast Saskatchewan. It is bringing on production from its lands in the heart of the high-liquids Montney shale fairway. It is a leader on social license to operate issues for its Utica shale gas discovery in the St. Lawrence Lowlands, Quebec. It is pursuing oil shale projects with the aim of commercially developing these significant resources.